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Fair Value (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Carrying Value and Estimated Fair Value of Financial Instruments

The following table sets forth the carrying value and estimated fair value of the Company’s financial instruments not reported at estimated fair value on the Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 (dollars in thousands):

		September 30, 2023								December 31, 2022
		Carrying Value				Estimated Fair Value				Carrying Value				Estimated Fair Value
Long-term debt (Level 2)		$	1,100,000			$	886,339			$	1,113,500			$	966,881
Long-term debt (Level 3)			1,450,000				1,030,511				1,200,000				881,480
Snettisham finance lease obligation (Level 3)			43,304				38,200				45,730				41,700
Long-term debt to affiliated trusts (Level 3)			51,547				45,021				51,547				42,836

Schedule of Fair Value of Assets and Liabilities Measured on Recurring Basis

The following table discloses by level within the fair value hierarchy the Company’s assets and liabilities measured and reported on the Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 at fair value on a recurring basis (dollars in thousands):

		Level 1				Level 2				Level 3				Counterparty and Cash Collateral Netting (1)				Total
September 30, 2023
Assets:
Energy commodity derivatives		$	—			$	32,318			$	—			$	(30,040	)		$	2,278
Foreign currency exchange derivatives			—				23				—				—				23
Interest rate swap derivatives			—				6,379				—				—				6,379
Equity Investments			—				—				50,477				—				50,477
Deferred compensation assets
Mutual Funds:
Fixed income securities (3)			1,119				—				—				—				1,119
Equity securities (3)			6,466				—				—				—				6,466
Total		$	7,585			$	38,720			$	50,477			$	(30,040	)		$	66,742
Liabilities:
Energy commodity derivatives (2)		$	—			$	75,804			$	15,373			$	(57,458	)		$	33,719
Total		$	—			$	75,804			$	15,373			$	(57,458	)		$	33,719
December 31, 2022
Assets:
Energy commodity derivatives (2)		$	—			$	146,232			$	288			$	(136,605	)		$	9,915
Foreign currency exchange derivatives			—				43				—				—				43
Interest rate swap derivatives			—				11,184				—				—				11,184
Equity Investments			—				—				54,284				—				54,284
Deferred compensation assets
Mutual Funds:
Fixed income securities (3)			1,267				—				—				—				1,267
Equity securities (3)			6,132				—				—				—				6,132
Total		$	7,399			$	157,459			$	54,572			$	(136,605	)		$	82,825
Liabilities:
Energy commodity derivatives (2)		$	—			$	258,769			$	18,022			$	(242,044	)		$	34,747
Foreign currency exchange derivatives			—				3				—				—				3
Interest rate swap derivatives			—				52				—				—				52
Total		$	—			$	258,824			$	18,022			$	(242,044	)		$	34,802

(1)The Company is permitted to net derivative assets and derivative liabilities with the same counterparty when a legally enforceable master netting agreement exists. In addition, the Company nets derivative assets and derivative liabilities against any payables and receivables for cash collateral held or placed with these same counterparties.

(2)The Level 3 energy commodity derivative balances are associated with natural gas exchange agreements.

(3)Included in other property and investments-net and other non-current assets on the Condensed Consolidated Balance Sheets.

Schedule of Quantitative Information

The following table presents the quantitative information which was used to estimate the fair values of the Level 3 assets and liabilities above as of September 30, 2023 (dollars in thousands):

		Fair Value (Net) at				Valuation		Unobservable		Range and Weighted
		September 30, 2023				Technique		Input		Average Price
Natural gas exchange agreement		$	(15,373	)		Internally derived weighted average cost of gas		Forward purchase prices		$2.62 - $3.86/mmBTU $3.30 Weighted Average
								Forward sales prices		$3.22 - $11.65/mmBTU $8.03 Weighted Average
								Purchase volumes		140,000 - 310,000 mmBTUs
								Sales volumes		75,000 - 310,000 mmBTUs

The following table presents the quantitative information which was used to estimate the fair values of the Level 3 equity investments as of September 30, 2023 (dollars in thousands):

		Fair Value at
		September 30, 2023				Valuation Technique		Unobservable Input		Range
Equity investments		$	50,477			Market approach		Comparable enterprise values		$130,000-$388,600 $246,000 Average
								Time to liquidity event		1 year
						Discounted cash flows		Revenue market multiples		0.42x to 5.47x Revenue 1.76x Average
								Market exit reduction		50%
								Discount rate		25%
								Annual revenues		$6,000 - $265,000
								Terminal date		2026

Schedule of Activity for Natural Gas Exchange Agreement Derivative Assets (Liabilities) Measured At Fair Value Using Significant Unobservable Inputs (Level 3)

The following table presents activity for assets and liabilities measured at fair value using significant unobservable inputs (Level 3) for the three and nine months ended September 30 (dollars in thousands):

		Natural Gas Exchange Agreement (1)				Equity Investments				Total
Three Months Ended September 30, 2023:
Beginning balance		$	(11,721	)		$	48,453			$	36,732
Total gains or (losses) (realized/unrealized):
Included in regulatory assets/liabilities			(3,652	)			—				(3,652	)
Recognized in net income			—				2,024				2,024
Ending balance as of September 30, 2023		$	(15,373	)		$	50,477			$	35,104
Three Months Ended September 30, 2022:
Beginning balance		$	(2,289	)		$	—			$	(2,289	)
Transfers in (2)			—				1,952				1,952
Total gains or (losses) (realized/unrealized):
Included in regulatory assets/liabilities			(4,551	)			—				(4,551	)
Recognized in net income			—				3,829				3,829
Ending balance as of September 30, 2022		$	(6,840	)		$	5,781			$	(1,059	)
Nine Months Ended September 30, 2023:
Beginning balance		$	(17,734	)		$	54,284			$	36,550
Total gains or (losses) (realized/unrealized):
Included in regulatory assets/liabilities			2,115				—				2,115
Recognized in net income			—				(3,174	)			(3,174	)
Purchases and debt conversions			—				2,367				2,367
Settlements			246				—				246
Other			—				(3,000	)			(3,000	)
Ending balance as of September 30, 2023		$	(15,373	)		$	50,477			$	35,104
Nine Months Ended September 30, 2022:
Beginning balance		$	(7,771	)		$	—			$	(7,771	)
Transfers in (2)			—				1,952				1,952
Total gains or (losses) (realized/unrealized):
Included in regulatory assets/liabilities			3,144				—				3,144
Recognized in net income			—				3,829				3,829
Settlements			(2,213	)			—				(2,213	)
Ending balance as of September 30, 2022		$	(6,840	)		$	5,781			$	(1,059	)

(1)There were no purchases, issuances or transfers from other categories of any derivatives instruments during the periods presented in the table above.

(2)The Company elected to measure certain equity investments at fair value on a recurring basis in 2022, as such the transfer in represents the value as of the election.

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- Definition

Tabular disclosure of input and valuation technique used to measure fair value and change in valuation approach and technique for each separate class of asset and liability measured on recurring and nonrecurring basis.

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Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

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Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

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